Digital Sovereignty and Financial Transformation in Europe
The Italian Banking Association (ABI) has expressed its support for the European Central Bank’s (ECB) digital euro project while advocating for the costs associated with the project to be distributed over time. Marco Elio Rottigni, General Manager of ABI, emphasized the digital euro as a symbol of digital sovereignty and the necessity for Europe to keep pace with global advancements.
During a press conference in Rome, Rottigni stated that Italian banks are in favor of the digital euro initiative, yet they believe that the initial costs should be gradually addressed. He noted that the banking sector cannot bear the burden of this transformation instantaneously and highlighted the strategic importance of the project for Europe’s digital sovereignty.
The digital euro initiative has gained momentum following an agreement among European Union (EU) finance ministers, the ECB President Christine Lagarde, and European Commission Vice President Valdis Dombrovskis. This agreement grants member state ministers the authority to decide on the issuance of the digital euro and the amount citizens can hold in digital wallets, addressing concerns over potential bank withdrawals.
The project envisions starting its pilot phase in 2027, with full implementation of the digital euro by 2029. However, ABI suggests that a dual approach should be adopted to keep up with the pace of other countries.
The Dual Model Consideration
Rottigni proposed that Europe should proceed with both central bank digital currency (CBDC) and digital currencies developed by commercial banks for a more balanced solution. He stated, “Europe shouldn’t lag behind; thus, both central banks and commercial banks should advance simultaneously in the digital currency ecosystem.”
Despite this, the plan has faced criticism from some European countries. Germany’s leading financial lobby group, the German Banking Industry Committee, along with conservative members of the European Parliament, have adopted a cautious stance towards the project. Specifically, MEP Fernando Navarrete suggested narrowing the scope of the digital euro for fundamental payment systems that lack internet connectivity.
Navarrete argues that the existing central bank infrastructure is already adequate for intermediary payments, and therefore, the digital euro should not be integrated into wholesale payment systems. This reflects ongoing debates about the most effective and sustainable path forward for digital financial innovations in Europe.